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So much for Obama's "labor and environmental provision" commitment in the context of international trade. He has rejected his own campaign promise, fully, by opposing a too-meak provision in the recent climate and energy bill. That provision would impose border charges on goods from other countries - countries without carbon dioxide regulation - in the year 2020. Yes. The year 2020.
The climate and energy bill narrowly passed the House, prevailing by 219 to 212 last Friday. The bill will increase costs of U.S. production in all categories. China is not debating a climate and energy bill. Neither is India or Mexico or Canada. (I make no comment on the wisdom of the bill itself, but only the trade aspects).
The solution to the cost differential between domestic and foreign production is to apply a border adjustment. "Border adjustment" means that good coming over the border from countries without this new environmental cost would have that cost imposed at the our border. China was furious with this prospect as per comments a couple of months ago when it said that the consuming countries should bear the cost of their pollution.
Now Obama has essentially said the same thing as China, speaking against the concept of the border adjustment, calling it a "tariff", on Sunday.
“At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade,” Mr. Obama said, “I think we have to be very careful about sending any protectionist signals out there.”
He added, “I think there may be other ways of doing it than with a tariff approach.”
The protectionism narrative is the one that the wacko free traders use. Obama told us all in Ohio that NAFTA should be renegotiated to include "labor and environmental provisions." But now he opposes environmental provisions in trade relations, enabling cheap polluters and enabling more air emissions.
This is a cop out. It is wrong.
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